Tesco has been cleared of a string of accusations of price fixing, despite a tribunal upholding OFT claims that it infringed competition law by sharing information over cheese prices with its rivals.
The latest twist in one of the longest running probes in retail history could result in a huge reduction of the £10m fine Tesco received last year, for alleged price fixing practices dating back to 2002 and 2003.
The Competition Appeal Tribunal rejected more than half of the OFT’s findings, finding there was “insufficient evidence” to conclude that Tesco was part of concerted effort to fix the price of cheese in 2003.
It concluded that Tesco was guilty of communicating its pricing to rival retailers via a supplier three times in 2002, whilst five other allegations were rejected and the appeal also said further evidence would be needed to determine if they were isolated incidents or a concerted pattern of price-fixing.
The ruling has raised the prospect of Tesco’s fine being significantly reduced in a further hearing to take place next year and heaps embarrassment on the OFT , which since launching the investigation has been forced to scrap probes into milk and butter pricing and make a massive £100,000 libel payout to Morrisons.
Despite that the OFT said today it “welcomed” the findings.
“The OFT welcomes the CAT’s confirmation that a concerted practice consisting of indirect contact between competitors via their common supplier is no different in substance from two competing retailers sitting across the table and telling each other what their prices will be next week,” it said. “This judgment sends a clear signal to all businesses that this conduct infringes competition law.”
But a spokesman for Tesco said: “We are pleased with today’s decision by the CAT. We have always maintained that we were not part of an overall plan to collude on prices. All the other allegations against us in this ten year process have already been dropped.”
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